Butterfield Bank’s profits rose nearly 38 percent in the second quarter, thanks to improved performance in the loan book and investment portfolio.The bank posted net income of $16.2 million for the April through June period — its sixth successive profitable quarter — compared to $11.8 million earned in the same period of last year. Profit was also up $1.5 million compared to the $14.7 million profit in the first quarter of this year.The bank slashed operating expenses by $2.1 million, helped by a reduction in its payroll of 107 staff, which drove a $1.5 million reduction in salaries and benefit costs.Butterfield CEO Brad Kopp said the bank had agreed to sell its Barbados subsidiary to Trinidad and Tobago-based First Citizens Bank Ltd for gross proceeds of $45 million. The deal is expected to close before the end of September.The bank also sold off its interest in Cayman-based insurer Island Heritage for a net gain of $4.3 million.There was good news for shareholders in that Butterfield announced it started a share buyback programme on May 1 that will authorise the bank to repurchase up to six million of its common shares and 2,000 preference shares.During the second quarter the bank repurchased 530,000 shares at an average price of $1.24 per share.By buying back its own shares, the bank reduces the number of shares outstanding, effectively making each share a larger stake in the business than it was before.Mr Kopp said the changes were aimed at improving shareholder value.“Our second-quarter results represent our sixth consecutive quarter of profit, and are improved year-on-year; the increase owed mainly to improvements in net interest income,” Mr Kopp said.“Amid ongoing economic weakness in our major markets and continued low interest rates, the results reflect the quality of our credit portfolios and the resiliency of our revenue model, with a good balance of interest and non-interest earnings.”Chief financial officer Brad Rowse said the bank’s loan portfolio increased by more than $200 million, while loan loss provisions increased to $4.9 million during the quarter.“The majority of the credit provision in the quarter related to a legacy commercial loan facility in our United Kingdom operation,” Mr Rowse said. The UK provision was for $3.8 million.“This level of provisioning, relative to our $4.1 billion loan book, reflects the good quality of our credit portfolio.“On the investment side, we continued with our strategy of investing in longer duration securities to match the profile of our customer liabilities, which contributed to further improvements in our net interest margin of 33 basis points.”Non-accrual loans made up nearly three percent of total loans, up 0.3 percentage points from the first quarter.The bank has operations in Cayman, the UK and Guernsey, as well as Bermuda. The Bermuda operation made the largest contribution to profit with net income of $8.5 million, up $1.5 million compared to the same period a year ago.Revenue rose $1.3 million in Bermuda to $49.9 million, with $0.5 million of the increase in non-interest income and $0.7 million in net interest income before credit losses.Customer deposits in Bermuda fell $0.1 billion during the first half of the year to $3.1 billion, while loan balances held steady at $2.5 billion.The Cayman business saw net income rise by $5.8 million to $8.3 million, boosted by the $4.3 million gain from the sale of the Island Heritage stake.The Guernsey business made a profit of $2.7 million, while the UK operation recorded a $3.1 million loss.The bank has bounced back to profitability over the past year and half under new management after a grim three years in which it recorded hundreds of millions of dollars in losses due to soured investments tied to US residential mortgages.